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There certainly is a strong trend in Lumber and it is downwards. The short trade is the only trade right now. For those who got in well done. For those who have not then be careful as Lumber is tanking far quicker than the time it took to reach its recent peak. Short trades normally last a shorter period than long trades.

The chart below shows that Lumber is clearly below its 20 day, 50 day and 100 day moving averages.

The Great Lumber Slump

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Lumber is playing out exactly how I had envisaged. I attach a chart below to nicely illustrate this.

Lumber (Timber) is what I would deem as a more 'defensive asset' which tends to hold its price well during market turmoils. Of course it is not as defensive as cash and fixed interest!

Therefore once this downwards pressure is over and it will then I can easily see another couple of years of Lumber prices slowly rising. This is when one must think about a long term trade in Lumber and just 'letting it ride'. However, one must wait for the downward move to conclude and then wait for a clear trend reversal to enter.

For now the only trade is short on Lumber so for those of you holding well done.

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It is slowly creeping upwards. It is not making the headlines or making any noises but it is my 'Silent Assassin' when it comes to a trade. It is not the 'sexiest' of Commodities but it was one of my best performing trades of recent times both on the 'long' and 'short' trades.

It is at a critical juncture right now but it is worth keeping an eye on as it can give a good indicator to the US housing market too! 😉

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For professional traders who are experienced it does not matter whether I post line or candle charts as they will pay little attention to my charts. For new and inexperienced traders one must keep things as simple as possible and try and articulate matters in plain simple English including charts.

I get many contacting me using IG's messaging service so I understand and appreciate my followers and those who read my posts. Therefore I deliberately keep things simple and my charts are no different. I get a lot of positive feedback from new and inexperienced traders who prefer and enjoy my simpler to follow posts. So I am catering for the audience that read my threads and posts.

Line graphs present less information than candle charts so it depends on what type of trader you are as to which you decide to use and which you prefer. It is a personal choice but one that will be derived from your trading style and strategy. I find that line charts are a lot simpler and removes all the 'clutter' and 'noise' from the charts some of which can confuse you and not necessarily make it any easier for you to trade effectively or profitably. I tend to use a 'daily' timeframe when I trade trends and my position is held for as long as there is a trend. Therefore for me I do not need to see all intricate details which can be seen on candle charts.

As a higher timeframe trader I prefer line charts as I want to look at a chart and get a sense of direction of the trend. I will switch and look at different timeframes but my 'default' is the 'daily'. I think more shorter time frame traders may prefer or have a use for candle charts. I find that the line chart provides a more clearer and visually simpler picture but that is just my personal preference. I think day traders may prefer candle charts but each to their own.

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